PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE

1. PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE Parliament 2nd September 2008

2. Contents • 2008/09 Conditional Grants Allocation • First quarter Conditional grants spending • National School Nutrition Programme • HIV and Aids • Infrastructure Allocation to Provinces • Early Childhood Development • Conclusion

3. Overall Departmental expenditure at 30 June 2008 3

4. Trends in Education Conditional Grants Actual spending on FET Recapitalistion Grant for 1st quarter by Colleges is R5,672 million representing 21,73% spending against the allocation

5. The department recorded a good performance in term of conditional grants spending from the past financial years In 2006/07 spending for all grants was 100 per cent The reduction in the allocation of National School Nutrition programme in 2007/08 created a pressure The grant was exhausted and commitments amounting to R19 million could not be paid Trends in Education Conditional Grants

6. The 2008/09 Budget Allocation

7. 2008/09 First Quarter Performance

8. The main objective for this grant is to Educate learners on Life Skill and HIV and AIDS and Care and Support to those infected and affected by HIV and AIDS The grant recorded a slow expenditure of 13 per cent in the first quarter Expenditure is expected to increase in the second and the third quarters The allocation for this grant will be exhausted at the end of the financial year HIV and AIDS Grant

9. The grant recorded 44.12 per cent for the first quarter The high expenditure was mainly as a result of payment of previous year commitments It is projected that the grant will over spend by R23 million in the current financial year Other challenges Insufficient administration budget for operational resources e.g. vehicles, computers. Insufficient personnel for monitoring and administration at District and Provincial Offices. National School Nutrition Grant

10. The first quarter expenditure not far from the 25 per cent norm (22.19 per cent) Slow expenditure as a result of delays in the awarding of the contract for construction of 15 schools The process finalized and contractors are on site Expenditure expected to increase in the 2nd quarter Infrastructure Allocation to Provinces

11. Anticipated over-expenditure on allocations for existing projects (other than 15 schools) due to bids closing above estimates Escalation costs Cost increases due to non-performance of original contractors Therefore have limited funds available to commence new projects. Challenges for Infrastructure

12. Capital Expenditure

13. Bulk of the budget for machinery is for Computers for schools (R36 million) The department constituted a task team to investigate alternatives to the SITA procurement processes Only during the week of 18 August 2008, the decision was taken to follow the SITA route.  It is expected that orders will be placed by end November 2008 Reasons for slow spending

14. ECD BUDGET

15. PERFORMANCE OF GRADE R FUNDING (excluding salaries paid via Persal)

16. CURRENTLY FUNDED INSTITUITIONS Number of schools/sites according to poverty ranking Number of Schools % Number of classes % Quintile 1 232 28.57% 428 35.79% Quintile 2 90 11.08% 174 14.55% Quintile 3 80 9.85% 139 11.62% Quintile 4 42 5.17% 81 6.77% Quintile 5 13 1.60% 19 1.59% Independent Schools 355 43.72% 355 29.68% 100.00% 812 1196 100.00% TOTAL

17. PAYMENTS • SUBSIDY FOR TEACHERS’ SALARIES • The subsidy allocation for salaries are made as follows: • R1 800.00 (unqualified teachers) • Teachers below the relevant NQF level 4 qualification • R3 000.00 (under-qualified teachers) • Teachers with the minimum relevant NQF Level 4 qualification (National Certificate in Early Childhood Development) but not fully qualified • R5 000.00 (qualified teachers) • Teachers with the appropriate 3-year teacher’s qualification (relevant to ECD)

18. PAYMENTS-CONTROL MEASURES • Transfers are only made if all the relevant forms have been submitted in time and are correct. • The following forms need to be completed and attached before the next transfer is made to the institution: • Claim form / Certificate of Compliance

19. PAYMENTS-CONTROL MEASURES • Financial Statement – Grade R Subsidy indicating expenditure for the previous funds received: Attached with: • Monthly signatures of teacher receiving a salary at the back of theFinancial Statement • Original or certified copies of all invoices of resources procured with FSDoE funds for the implementation of Grade R • An original or certified copy of the bank statement indicating the amount for previous funds received for the Grade R subsidy

20. Pre-Grade R. • The pre-Grade R allocation for 2008/09 is R6.9 million • The department planned to train 200 Pre-Grade R practitioners towards NQF Level 5 during this current financial year. • The preparation towards advising the bid for training is underway.

21. Pre-Grade R achievements • 2007/08 250 practitioners from 100 community-based sites were trained towards NQF Level 4 and 96% were successful (Flemish Project) • Developed Pre-Grade R Curriculum through the assistance of the Flemish Project

22. Monthly Finance Committee meetings are held to discuss underspending and remedial actions Quarterly review sessions are held to provide feedback on service delivery and the budget. Monthly expenditure reports are sent for the attention and the comment of the HOD and the Executive authority. Each branch is allocated a management accountant to assist with all financial related queries including budget management Letters are written to managers who underspent to inform them of the status quo and the implications of their underspending. Where underspending persist affected manager are brought before the executive leadership and the MEC to account for their actions. Where managers are not able to spent despite all the interventions funds are diverted and spent in line with objectives of the department. Monitoring Capacity 22

23. Monitoring Capacity Continued • National School Nutrition Programme grant • Lack of human resource capacity is experienced under this project • Regular progress reports, monthly/quarterly • HIV and AIDS grant • Monitoring is effective with a full-time Provincial co-ordinator ensuring that the activities take place strictly to the approved business plan and assisted by District Directors • Infrastructure Allocation to Provinces • Monitoring is effective between the Department and the Department of Public Works, Roads and Transport through monthly meetings held between the two departments • Further Education and Training grant • Actual spending by College is monitored on a monthly basis by officials at Head Office. • Reasons for under / over spending must be submitted on a monthly basis by the respective Colleges

24. CHALLENGES • Most of the schools in the lower quintiles that still have to be identified for Grade R Funding are farm schools with a Grade R or Grade 1(to be used as benchmark) enrolment of less than 10 learners • Additional classrooms need to be built for some schools to enable them to offer Grade R. ECD section busy with audit to determine the exact need. • HR Implications • Growing Grade R also requires that additional officials be appointed at District level for monitoring and support

25. Conclusion • Generally spending on conditional grants was low in the first quarter • Department project over expenditure on National School Nutrition Programme • Expenditure on Infrastructure Allocation to increase as construction of 15 schools started

26. Thank you!!